In the 2015 summer Budget, George Osborne, the Chancellor of the Exchequer, introduced a new National Living Wage (NLW) of over £9 an hour by 2020.

This will replace the current minimum wage, which is currently £6.50 an hour for those aged 21 and over. The new NLW will be set at £7.20 an hour for those over 25 from April 2016, rising to at least £9 an hour by 2020.

To help offset the increased costs for employers from the new NLW, the government has pledged to increase the national insurance contributions employment allowance – the amount that can be claimed back from an organisation’s NI bill – by £1,000 to £3,000 a year from April 2016. "This will help all businesses and charities, particularly smaller ones, with additional wage costs," the main Budget document says.